Comment from Andrew Wolstenholme

17 October 2016
James O'Jenkins

Today sees the publication of Mark Farmer’s independent review of the sector’s labour model.  I’d like to thank Mark and his team for the hours of work he has put into to producing a thorough examination of our sector’s labour model.

Mark’s review does not make comfortable reading.  His inescapable conclusion is that with low investment in innovation and an ageing workforce, our industry is facing a real capacity crisis.  If construction is to deliver the essential homes and social and economic infrastructure that the UK needs, we simply cannot continue with the status quo.

We will be looking very carefully at Mark’s report and its recommendations.  However for me the most striking thing is that, in skills and other areas, we have reached a tipping point and we can not go on doing things the way we have always done.

At its best the UK construction sector is world class.  We have a global reputation for our architectural and engineering skills and for our ability to deliver low carbon and sustainable solutions for the built environment.  Our recent record of delivering mega-projects is the envy of the world.

But the sector continues to face fundamental issues.  The combination of our cyclical workload and low levels of client leadership result in a fragmented supply chain.  This blocks opportunities to maximise the value across an asset’s life-cycle.  This drives competition on the basis of price alone which results in low profit margins across the industry.  It, in turn, means that the construction industry is unable to sustain the investment in skills, technology and innovation needed to deliver the step change in productivity necessary to meet the CLC’s ambitions.

Leadership Councils representing other sectors have achieved great improvements in productivity and competitiveness by focusing on a few big things, bringing industry with them and doing them well.  Based on this proven route to success, the big question is, where should the CLC focus?  Our answer is:

  • DIGITAL – delivering better, more certain outcomes by using BIM enabled ways of working
  • MANUFACTURING – increasing the proportion of off-site manufacture to improve productivity, quality and safety
  • WHOLE-LIFE PERFORMANCE – getting more out of new and existing assets through the use of smart technologies.

By focusing on these 3 themes, and working with other organisations to join forces, mobilise and accelerate change, we can move the ‘dials’ to benefit the whole industry.

In a post brexit world, there has never been a more important time to ‘upgrade’ our sector.  Imagine the possibilities if we had a pipeline of work that encouraged everyone to invest in skills and innovation and by doing so became more profitable and better able to grow.  Imagine the possibilities that by spending a pound in construction it drew on the cross-industry capabilities, and SMEs, throughout the whole of UK and gave us renewed confidence to export our services, expertise and products overseas.

The UK is set for profound change and as a key enabler to the forthcoming Industrial Strategy construction must be ready to play its part.

Andrew Wolstenholme, OBE

Co-Chair of the Construction Leadership Council